Are These On Your Friday Morning Watch List?
Penny stock is a term that applies to any security trading below $5. With so many publicly listed companies, there are plenty of options for traders to consider. But, it’s not enough to find the biggest gainers of the day. Rather, you should be proficient in the penny stock that you are watching. This means knowing what its financials are, what it is doing to stay competitive, and how profitable its business model is. At the very least, you should know why the stock is moving the way it is when it hits your watch list.
With these factors in mind, you can begin crafting a solid list of penny stocks to watch. In 2021, there seems to be a heavy focus on tech penny stocks. This is due to most work being done online and the high demand for all things tech-related. Because of this, there is a lot of bullish sentiment surrounding tech stocks right now.
There are a few things to consider before making any decision. For one, President Biden is working on getting a major stimulus package through the government. This means that we could see a flood of capital going into the hands of American citizens. The last time that happened, we also saw a flood of new traders. Any correlation? In the long term, investors should consider the potential inflationary effects of this.
Next, we have the looming pandemic, which is actually lessening in severity for the first time in months (for now). If trends continue the way they are, we could see the reopening of businesses and the U.S. economy. Finally, investors should take into account the massive speculation that is affecting all stock prices right now.
Tech Penny Stocks to Buy [or avoid]
Since the “Gamestop event,” speculation has become paramount amongst retail investors. And while this doesn’t affect all stocks, it is definitely something to take into mind. With tech in focus, there are plenty of options for penny stocks to watch. While the information above is not tech-stock specific, it is useful for investors. With all of this considered, let’s look at four tech penny stocks that have begun trending at the end of the week.
- Biolase Inc. (NASDAQ: BIOL)
- Rewalk Robotics Ltd. (NASDAQ: RWLK)
- LAIX Inc. (NYSE: LAIX)
- Cheetah Mobile Inc. (NYSE: CMCM)
Biolase Inc. is a penny stock that we’ve covered a handful of times over the past six months. During that time, BIOL stock has continued to climb to its February 4th price of $1.30 per share. On Thursday, BIOL shares climbed by as much as 13%, ending the after-hours session at roughly $1.30 per share. Biolase Inc. is a company that produces a large range of products for use in the dental industry. As its name suggests, the company focuses on producing laser devices used in various dental applications.
In early October, the price of BIOL stock teetered at around $0.30 per share. As we see now, shares are up by more than four times that amount. One of the major reasons for this is that BIOL stock shot down greatly when the pandemic first hit. This makes sense given that dental procedures were halted, alongside most other businesses.
However, Biolase has reported that dental procedures are occurring at nearly what they were before Covid. With over 271 patented products, Biolase seems to have a large grasp on the dental biotech industry. The company states that it has sold over 41,000 laser systems in more than 80 countries worldwide. On February 4th, the company announced that it had regained compliance with the NASDAQ minimum bid price. All of this good news means that Biolase has seen more popularity than usual. Will it be on your list of penny stocks to watch?
Rewalk Robotics Ltd.
Up over 35% for the day on February 4th is RWLK stock. Similar to Biolase, Rewalk Robotics is a tech company in the biotech industry. The company offers medical devices that act as exoskeletons. These devices are used for individuals who otherwise have limited mobility. In addition to its use as a rehabilitation device, Rewalk produces these devices for at-home and community purposes. This means that it has two unique markets to provide demand for its products. On the one hand, the company supplies medical facilities such as rehab centers and hospitals. On the other hand, Rewalk supplies direct to third parties that sell directly to patients.
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Based in Israel, Rewalk has been producing these devices for over 20 years. Additionally, the company has headquarters in various locations around the world, including Germany and the U.S. This means that it has the ability to reach a broad range of audiences with its products. A few weeks ago, the company announced that it had repaid in full its debt from Kreos Capital V. The total loan amount, placed in 2016, came out to roughly $20 million. This is a big milestone for the company and could reflect positively on its balance sheet. Investors should keep an eye out for the company’s next financial statement to see if there are any further benefits to its 2021 outlook.
Next on the list of tech penny stocks to watch is LAIX Inc. LAIX Inc. is a provider of online English learning products in China. Its pipeline of products includes a large range of software that offers language education services to Chinese residents. This includes apps such as DongNi, Darwin, Liuli, and more for adults. The company also has several products that provide children the same services. LAIX utilizes its proprietary AI software to enable easier learning for its users. Its products also have a social component, which helps to drive traffic and potential revenue. A few months ago, the company reported its Q3 2020 financial results for the period ending on September 30th. Since this is its latest financial report, it’s worth taking a look at.
In the release, the company posted net revenue north of $35 million. And while this is an 11% decrease year over year, we have to account for the effects of covid on all businesses. The company also reduced its sales and marketing expenses by 8%, which should help its future balance sheets. Lastly, the company pulled in a $10 million net loss, a small decrease over the previous quarter. In the third quarter, the company reported that it had more than 500,000 paying users. Dr. Yi Wang, CEO of LAIX, stated that “we have seen a constant flow of positive effects on our streamlined operations. Our primary focus area remains on the optimization of our product mix and improving the learning experience.”
Cheetah Mobile Inc.
Cheetah Mobile Inc. is another penny stock on our radar after its 38% gain on February 4th. If you haven’t heard of CMCM stock, you’re probably not alone. Cheetah Mobile is a company that produces a large range of applications aimed at the Chinese market. Within its product pipeline are several applications such as Clean Master (a junk file cleaning program) and Security Master, Battery Doctor, and more. As you can see, these products are aimed at the digital utility market, which has grown substantially in the past few years. With more people utilizing digital products than ever before, Cheetah Mobile has seen renewed popularity.
In addition to these products, the company offers video streaming services and mobile games. Cheetah also produces advertising software and cloud-based analytics engines. It is quite clear that Cheetah Mobile at the crossroads of several popular industries right now. While no news was announced on February 4th for the company, we did see several Chinese tech penny stocks jump during the day. Will this be a trend we see continue heading into Friday’s session?